With renewable energy trade tensions and disputes on the rise, China’s wind and solar power companies are investing more overseas, focusing on markets where government subsidies and incentives improve renewable energy project finance economics.
GE announced yesterday that it will supply 31 of its 1.6-100 and 18 of its 2.75-103 wind turbines to Longyuan Canada Renewables, which is developing the 100-MW capacity Dufferin Wind Farm in Ontario’s Melanchthon County. The project is parent China Longyuan’s first venture overseas.
The only Canadian province to enact a renewable energy feed-in tariff (FiT), part of the province’s Green Energy Act, Ontario’s become a driving force in the development and growth of Canada’s wind energy sector. Industry forecasters foresee another record-setting year for Ontario wind energy in 2012, following 2011’s record-setting installation of 1,688 MW of new wind energy capacity. Wind energy in Canada as a whole has increased nearly ten-fold in the past six years, according to the Canadian Wind Energy Association (CanWEA).
China Longyuan is China’s largest wind energy project developer, and the fifth-largest worldwide. Longyuan added 2.1 GW (2,100 MW) of wind power capacity to its portfolio in 2011, more than any other wind energy developer in the world. Installed capacity of its wind power projects totals 6.55 GW, with half installed in Inner Mongolia, Heilongjiang, and Gansu provinces.
China Longyuan Realizing its Overseas Wind Energy Ambition
The wind power project developer raised $2.2 billion in a Hong Kong IPO in 2009, a year in which its profits doubled to 894 million yuan ($131 million). With capital in hand, management set off on a strategic program to expand internationally, with a company executive saying it wanted to invest in the US; Eastern European countries, such as Hungary; and South Africa.
“The Dufferin Wind Farm marks our first global wind project outside of China,” said Wu Hao, president of Long Yuan Canada. “With rich wind power resources and strong supporting policies for its wind industry, Canada has created an excellent investment and operational environment for wind farms. For this very important project, we are glad to work with GE, a technology supplier with an outstanding global reputation and experience.”
Participating in overseas projects is a strategic priority for company management. Their current plan calls for investing some 92 billion yuan ($14.6 billion) and installing at least 16 GW of wind energy capacity by 2015 in a bid to move further up the ranks of the world’s largest wind power developers. It currently ranks third, behind Spain’s Iberdrola Renovables and the US’ NextEra Energy.
Longyuan recently signed an agreement with Spain’s Gamesa, which calls for the two multinational wind energy leaders to partner in developing wind power projects internationally. “In Gamesa we have found the ideal partner for our growth strategy,” company president Xie Changjun was quoted as saying.
China Longyuan management sees national and local markets with renewable energy feed-in tariffs (FiTs) in place as prime investment opportunities. Wind tariffs in South Africa are high, at the equivalent of one yuan per kilowatt-hour (kWh), China Longyuan board secretary Jia Nansong told attendees at the 2010 Renewable Energy Finance Forum. That compares to Chinese feed-in tariffs ranging from 0.51 to 0.61 yuan per kWh.”
First Customer to Take Delivery of GE’s 1.6-100 Wind Turbines
Nonetheless, it’ll be GE, not Gamesa, supplying Longyuan with wind turbines to develop the Dufferin Wind Farm in Ontario. In doing so, Canada Longyuan will be the first customer to take delivery of GE’s 1.6-100 wind turbine, which the US multinational says is the most efficient in its class.
“Both of these wind turbines demonstrate our continuing commitment to innovation, with new efficiency and productivity features that lead to improved project economics for our customers,” said Vic Abate, vice president of renewable energy for GE. “As the competition grows across the global wind industry, the most cost effective projects with the best technology will win.”
The GE 1.6-100 features a 100-meter rotor diameter and wind-sweep area 47% greater than its predecessor, GE’s 1.6-82.5 model, resulting in a 19% increase in annual energy production at wind speeds of 7.5 meters per second (m/s), GE notes. In contrast, the larger, GE 2.75-103 wind turbine offers high efficiency even at low wind speeds, according to the company. New electrical system features and GE’s proprietary 50.2 blade design offer an annual energy production increase of 9% as compared to GE’s older 2.5-100 model.
GE expects to ship the wind turbines to Longyuan’s project site in Ontario in 2013. Commercial operation of the Dufferin Wind Farm is slated to begin in 2014.